Value-added Programs Pay off With Right Management
Cattle sold in the first year of the "Buckeye's Best" value-added program brought in almost $6 more per hundredweight than those not participating, according to data compiled by Ohio State Extension.
The Ohio Cattlemen's Association in cooperation with Ohio State Extension and the Ohio Veterinary Medical Association launched Buckeye's Best in 1996 to improve the market for Ohio calves.
The value-added program assures buyers that cattle have received vaccinations and other health treatments. It requires farmers to wean calves at least 28 days before sale and to acclimate them to feed in order to reduce stresses in the transition to feedlot.
Perry County Extension agent Jeff McCutcheon says Buckeye's Best calves averaged $53.93 per hundredweight. That compares to $48.07 per hundredweight for non-participants. Prices for Buckeye's Best calves ranged from $35 to $70 per hundredweight; non-participants ranged $25 to $64 per hundredweight.
A lingering question is whether Buckeye's Bests' higher prices were enough to cover producers' costs for adding value to the calf, McCutcheon says. "Usually participating in a program like this reduces the risks to the buyer," he says.
"Participating in the program increases the producer's cost of producing calves. You've got the extra costs of vaccinations, veterinary costs, the charges for time and feed costs after weaning them," he says.
McCutcheon says he thinks farmers still can benefit from the program if they control feed costs, particularly hay, the largest percentage of the ration. An alternative would be a pasture-based weaning system with supplementation.
OSU Extension figures also show the average paid price for Buckeye's Best calves is close to the break-even price of $6.88 per hundredweight when feeding corn costing $5.24 per bushel. This is based on a 1.5-pound gain per day over 28 days. Of course, break-even costs are lower when feed costs drop. In 1996, Ohio per-bushel corn prices were lower, ranging from $3.21 in January to a mid-summer high of $4.90, dropping to a harvest low of $2.62.
"It can be done profitably, but I don't think you can just wean them, throw them a ration and not worry about costs," McCutcheon says.
A total of 321 Buckeye's Best calves were sold at fall auctions in Gallipolis, Zanesville and Hillsboro. McCutcheon compared the data to prices from 479 non-participating cattle sold at the same auctions.
McCutcheon also compared the prices to certain animal characteristics in order to see what kinds of cattle drew better prices.
Factors associated with higher prices in the study included: participation as a Buckeye's Best calf, frame score, heavy muscling, being a steer (compared to bull or heifer, the latter doing the poorest), and increased lot size of uniform cattle.
Producers need to select animals to optimize the effect frame and muscling has on price, McCutcheon says. He also says the price correlations to sex and lot sizes were consistent with other studies.
Buckeye's Best and other value-added programs can be useful if producers carefully study their management practices, McCutcheon says.
"Before deciding to participate, look at the costs of participating. Compare the costs and break it down per hundredweight to see if it will be profitable."
To participate in the 1997 Buckeye's Best program, call the Ohio Cattlemen's Association at (614) 873-6736.